Broker Responsibilities

Brokers owe customers particular duties of care. Understanding what the broker is obligated to do will help an
investor know when a lapse has occurred.

 Good Faith and Fair Dealing. Brokers must conduct their business in a manner that reflects honor and
integrity. Brokers may not trade securities in your account without your permission, excessively trade to
increase their commissions, or use your funds or securities without authorization.
 Know the Customer. Under the "know your customer rule," brokers must learn about their customer's
financial conditions before making any investment recommendations, and this information must be kept
current.
 Suitable Recommendations. Investment recommendations must be consistent with the customer's
financial condition, investment objectives, and risk level.
 Duty of Loyalty. Brokers must put the customer's interests first.
 Obligation of Disclosure. Brokers must be truthful in their dealings with customers, and disclose to them
material information reasonably related to an investment decision. This includes the risks of such a
decision.
 Authorization for Trading. Brokers can only execute trades to the extent that they have received
permission from the customer to do so.